NTT DoCoMo to Launch Japan's First LTE Service on 24 December

NTT DoCoMo announced today (8 November) that it will launch Japan’s first wireless service based on LTE technology on 24 December 2010. The new service, under the “Xi” brand, will enable mobile data communication at a maximum downlink speed of 75 Mbps or about 10 times as fast as DoCoMo’s current 3G service. DoCoMo will initially sell Xi data terminals for connection to mobile computers, beginning with the USB-type L-02C. Voice calls using Xi will become possible sometime within the 2011 fiscal year (starting April 2011) when DOCOMO will begin launching LTE-compatible mobile phones. The Xi service will initially be available in the Tokyo, Nagoy, and Osaka areas, with other major cities and regions to be added thereafter. Upon launch, two data-only billing plans will be offered:, “Xi Data Plan Ninen” and “Xi Data Plan”. Xi Data Plan Ninen, which will require a two-year contract, will cost between ¥1,000 (US$12.3) and ¥6,510 for up to 5 gigabytes (GB) of data per month. Over 5 GB, ¥2,625 (including tax) will be charged for each 2 GB. As a special introductory offer, the maximum monthly charge for unlimited data using Xi Data Plan Ninen will be ¥4,935 through April 2012.

Meanwhile, DoCoMo announced its 2010 winter/spring 2011 handset lineup of 28 new models in 72 colors, the largest and most diverse collection of models ever released by the operator, which will be launched on or after 12 November 2010. The lineup offers a wide selection of 3G handsets in four user-segmented series, smartphones equipped for mobile-wallet functions and viewing “one-segment” mobile digital terrestrial television, as well as two data terminals for the upcoming Xi LTE service. The L-02C USB data terminal for Xi service, enabling high-performance mobile gaming and video streaming, will be launched in December 2010. The F-06C ExpressCard-type terminal for LTE, enabling mobile video-streaming and live video-conferencing, will be launched in April 2011.

Outlook and Implications

• First LTE in Japan: DoCoMo’s launch of LTE will open up a new stage of competition in the already cut-throat Japanese telecoms market. The pricing of the new service is particularly attractive. The effective monthly fee for Data Plan Ninen has been set at ¥6,510, just 9% higher than what the operator charges for its existing service, while the data speeds offered on the new service are five to 10 times faster than currently available. The ¥6,510 amount will cover up to 5 GB of data download, which is sufficient for listening to 1,250 four-minute songs or watching normal-quality online videos for 23 hours. DoCoMo believes that the 5-GB threshold will be enough for 99% of its customers. Along with its improved offerings in the smartphone lineup, DoCoMo’s LTE service will give the country’s largest mobile operator a strong competitive edge over its smaller rivals. The operator has recently reported stronger profitability for the first half of the current fiscal year ending 31 March 2011, thanks to cost-cutting measures and improved subscriber additions (see Japan: 28 October 2010: NTT DoCoMo, Softbank Report Improved Profits for H1).

• Competing Roll-Out Plans: DoCoMo’s LTE service will be the first in Japan, but the country’s three other mobile operators are also planning to follow suit. KDDI and EMOBILE plan to launch the new service sometime in 2012, while Softbank Mobile has appeared more cautious towards LTE roll-out over cost concerns and has yet to set a date for the launch. According to the LTE network deployment plans submitted by the four Japanese mobile operators to the Ministry of Internal Affairs and Communications, they will invest more than US$10 billion by the end of March 2015 in base stations and other LTE service equipment and facilities. DoCoMo has earmarked ¥343 billion for the investment, while KDDI and Softbank Mobile has budgeted ¥515 billion and ¥207.3 billion respectively. By end-March 2015, the four have forecast around 36 million LTE subscribers, a figure that is ambitious. Meanwhile, WiMAX and PHS will be competing with LTE in the next-generation segment. KDDI, through its joint venture UQ Communications, launched the country’s first commercial WiMAX service last year. Softbank, which recently agreed to acquire PHS service provider Willcom, will be looking to develop next-generation PHS services (see Japan: 15 October 2010: Softbank Agrees to Acquire 100% of Willcom).